a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ ♪ brilliant. let's get out of here. warp speed. ♪ ♪ sorry, "closing bell." this is the epic selfie. >> "closing bell" starts right now. >> started ten minutes ago. welcome to the "closing bell." i'm kelly evans at new york stock exchange where it's not looking too good with an hour to go in the trading day. >> what if they gave a dip and nobody bought it? >> that's what we're looking at today. 16,000. we came, we saw. we have not confertot conquered.

>> we've seen a lately last hour selloff in this market. and we wonder if that will happen today on a month when this is usually the best month of the dow. it's been a forgetful month. >> but not for the corporate bond market. pace record is being set and broken. we'll see if that brings out the buy the dip. >> interest rates are still historically very low. it's very cheap to borrow money for corporations right now. we've got a lot of market information to get to over the next hour or so here. >> in a down market, this stock is bucking the trend. don't look now but apple is surging again. it's now north of 550 and climbing. a ton of news driving it. take a look. if there's still time to buy the stock at these levels. you could have gotten $100 more cheaply. >> more people bought it last year at $750. they're waiting for it to get back to that level. >> saying pretty please. >> also, very serious story out

of motor city. detroit is now broke city. a judge ruling a little -- a few hours ago the city's bankruptcy can go forward in what will be the biggest municipal bankruptcy in u.s. history. this is not a huge surprise but is a big disappointment for the pension plan out there. it has much wider implications for investor. anybody that owns a muni bond needs to sit up and pay attention to this story. we'll tell you why and what it mean. >> same for anyone with a pension. >> let's take a look again at markets across the major indexes. we're seeing red, down about 0.7% on the dow jones. nasdaq still above 4,000, off about 12 points or so. that ten-year bond yield, above 2.8% earlier, has sunk after we saw heavy losses across the european session as well today. >> let's talk about today's market action. our "closing bell exchange" joined by meg green from meg green and associates.

scott cavanaugh from first foundation. rob morgan from fulcrum securities. mike santoli and rick santelli. i love it when we have santoli and santelli on in the same show. >> that's trouble. >> meg green, what are you doing with this market right now? what do you think is going on? are they taking profits or what do you think? we're always rebalancing, taking off from the table if it gets too high. i think people are forgetting about a basic balance. in or out, no. if you're building wealth you have to be in the market. just temper it. 6 0/40 portfolios will work over the long haul. people who are in 401(k)s, be happy it's down a little bit. add on because dollar cost averaging will take you over the mountains, what you need to be. >> what do investors do? stick with what worked in 2013 or move into the less loved

parts of the market either in u.s. or overseas? >> we look at less cyclical type countries. we're focused on large cap value. and i think next year will be quite challenging. i think there will be a lot of volatility in the market for those investors that participated this year. they had a great ride but i think next year will be a little more difficult. >> i love the disagreement we have brewing here up. say you like large cap value. you like small cap growth. what are you looking at that he's not? >> i tend to think we're halfway through this ball game. you know, bull markets, they tend to have a number of phases. we haven't even gotten to the point yet where individual investors believe we're in a bull market even though we're four years into it. that's reflected in the fund flows into equity mutual funds which have not been robust this year. i think once that kicks in we'll see this bull expand.

we have a ways to go until we get to rational exuberance. as a market -- i have liked big cap stocks but i have shifted gears this year. more to the small cap space because that tends to be where the money will go when a bull market broadens out and expands. >> you know mike just in terms of gauging sentiment, first day of the month we closed in the negative. looks like it could be two days in a row. does that tell you how investors are positioning for december or into next year? >> i view it as pent-up selling. we had eight straight weeks up in a row. a week ago i was saying, you know, i don't disagree have you this upward bias in december. the problem is, everyone seemed to agree with it. therefore, it was like you sell first, then i'll think about selling. we're seeing that effect. we're working off an overbought, overoptimistic condition. doesn't have to be more serious than that, pending what happens friday, if we decide we're going on the taper merry-go-round and decide to debate that in an intense way. i think it's pent-up selling.

the market doesn't owe us much more this year. as long as the credit markets hold together as they are right now, it's hard to see things getting too nasty. >> rick, credit marks are hanging in there. we were noticing here today that it was the european equity markets that were weighing our markets down. they closed on their lows of the day at 11:30 eastern time. that's when our selling really picked up in earnest here. what's going on there today? >> i'll tell you, i think europe in 2014 is going to be a big story. "the journal" had a story about how italian banks are full of bad loans. cutting credit lines to pretty decent companies. this is going to be something to spread to a lot of the european banks. they bought time. what did they do with that time? we saw interest rates tick down a bit. we're still holding important players, and i think the pacman buzz is going to be enlightened once you trade and close above

28 2. i think a clear path to potentially 3%. it might be adp tomorrow, might be bls friday. on detroit, there's a lot of stories out there. let's throw up the ambac. it gave up the roost a little bit after that 11:00 eastern ruling. if you look at a one-year chart you could see this ruling was built in and expected. if you're holding munis, don't despair. if citi going through bankruptcy can get their act together and see public pension and another contractual agreement not to be treated special, they might be able to get their house in order, which would be the best thing in the grand scheme of thing for muni holders. >> people are happy for the dvr to sewly review rick's answer to slowly unpack his answer. >> whether you have a pension bill or thinking of investing in municipal debt which has been hammered, meg, i wonder are you telling people to get involved to pick up some of the deals they can potentially get across

this space today? >> the muni market they are more individual investigators. the muni market has been very robust very hard if you're going on the short end. you don't want to go long with rising interest rate environment. munis are awesome. fabulous to have in portfolio for balance and diversification. i'm not telling anyone to run from munis. i say grab them. the market is difficult, it's tight. >> do you agree? there's a warning to be taken from muni bond investors? >> i don't think it's one that's going to be broadly applicable. i don't think it's one to scare people away from the asset class. i think what will happen when you get to year end, a lot of muni funds will be pressured more, tax law selling -- >> lots. >> you'll do okay buying these funds at a discount. >> we won't necessarily see that pressure from the broader market, certainly.

people maybe the last couple of years, any harvest, time is running out. >> there's still lots of things to harvest this year. lots of munis you can swap out of. munis are out. those are good places to swap into a different fund if you need to. take the loss, put it in your pocket if you don't need it and carry it forward. tax law accounting is huge in investing. >> we've been out of the muni market for the past 14 to 15 months when munis started getting back over 5% we've been a buyer. we've been aggressively buying municipal bonds. >> rob morgan any opinion on that before we go, quickly? >> absolutely. i think having a portfolio for individual investor tilted more toward short end and rising rate environment makes sense. i think detroit bankruptcy spells trouble more for retirees on pension plans more for than muni bond investors.

>> a lot going on there as well in detroit. >> one quick point. there was recent news more redemptions in bond funds and i think this is a rote process holding longer dated funds position by the public will be under more duress than the muni market. >> good point. thank you all, folks. >> thank you. >> thanks a lot. >> 50 middle left in the trading session here. we'll see. down 1230. we were down 149 at the low of the session. we're off the lows. will we see this late day selloff? >> we are losing some altitude. president obama relaunching the push to get american to sign up for obama care. but is he jumping the gun with his website still not 100%? what about all those complaints over sky high premiums? up next we'll talk to former ubs chairman robert wolf who has been one of president obama's closest allies on wall street. >> apple shares on a roll after a strong started to the holiday

shopping season. we'll hear from somebody who says investors should buy this stock now before it really takes off. >> and there's been a lot of buzz online and on social networks about that minimum wage discussion we had yesterday with the mcdonald's worker. take a lynn. >> have you asked for a raise before? >> i have and i was pretty much told it's going to come eventually. just wait. >> coming up former council of economic advisers says be careful what you wish for. raising the minimum wage will only end up hurting the very people it's intended to help. he's join us on the "closing bell."

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announcer ] nyquil cold and flu liquid gels don't unstuff your nose. they don't? alka seltzer plus night fights your worst cold symptoms plus has a decongestant. [ inhales deeply ] oh. what a relief it is. welcome back. at this hour president obama is touting what could be called obama care 2.0. >> you have to call it something. seems today was a bit of a reset button for signature legislation and john harwood is at the white house with more of the details. >> reporter: the president is trying to get new momentum for this law that's had so much struggle this fall. the administration aides have been making the case the last couple of days the website has been substantially fixed for most people. and the president seemed to use

this appearance today to snuff out any idea which had gained traction in recent days this law can be done away with entirely as republicans hope. >> eye always said i will work with anybody to implement and improve this law effectively. you got good ideas, bring them to me. let's go. but we're not repealing it as long as i'm president. i want everybody to be clear about that. >> reporter: but, of course that doesn't mean the law will be successful. we're not going to know that until we see what the enrollment data is and if we can get enough people in federal exchanges and right balance of people so they're financially viable and this law, the underlying theory of the case will be shown it's employing to be successful. but that's a few months off, guys. >> john harwood for us in washington. thanks very much. president may be pushing new and improved obama care website.

once it works, technically, will it be popular and successful policy? >> let's talk with robert wolf sits on president's export councils. he just discussed the affordable care act with the president yesterday. i mean, we all know, it has been a very rough road to begin with for the aca. what can be done to turn the public opinion about it when you have all these technical glitches to begin with? >> no question the technical glitches have made it difficult since the inception. this is 20% of the economy health care. it's not going to happen overnight. for me who's not a health care specialist, i look at three or four things that make it critically important. 3 to 4 million people uninsured, will be insured. the 100 plus people that get preventive care that don't have it and the 125 million plus people that have preconditions that will now have to not worry

they won't get insurance. those are the things most important to me that is not someone worrying about the day to day website. not that it's not a problem. >> the day to day function of the website comes back to this question about affordability for health insurance longer term. to get younger healthier people involved, it's got to be easy for them to sign up not as difficult as it is right now. when we start to look at what the premiums will be for the next year and beyond i mean, all -- this becomes very, very poblgd. lgd jfrz >> to get health care lower costs, website has to be ioned out. we need to get the young and vibrant to want to go on the exchange. adds people are more educated about it that's what will

happen. that's what we're hoping for for all of this country to lower health care costs. >> i'm intrigued by your first answer where you essentially laid out some of the objectives of the affordable care act. then you said but i'm not too worried about details of the website. isn't that precisely the problem with all of this right now? the objectives were clearly laid out but the details were not well planned. for example, the famous promise made by the president that if you like your insurance plan you get to keep your insurance plan. when, in fact, for 5%, that's not the case. and now people are getting those cancellation notices. the details were not that well thought out. >> agreed that the details did not come to fruition once we began the website. let's be clear, 20% of this country's not based on a website. we'll get the website right. if it's right 30 days later, then we'll still get it right. they had a million go through

yesterday healthcare.gov, that's a positive. i think those that need to pick better insurance, that's better for all of us. we need the right insurance and right care. i think what we're all missing here is when you're trying to move 20% of the economy, it is going to take time. they are going to be bumps in the road. i think in my opinion, the bigger picture is what's more important. that's getting 30 million uninsured. >> just to pivot and speak more broadly about the relationship between wall street and the president as it stands now, we've seen this go from a high point, more or less with his initial election in 2008 to a low point, whether it was the language he used or some of the relationships that went on to change when they saw policies that were in place. what is it like today. where do things stand with if it's even possible to describe it, wall street generally. >> i would tell you that the alignment between the white house and the business community is probably the most aligned. away from the rhetoric people

like to talk about, wall street and the business community wants immigration reform. >> wall street and business community wants tax reform. president would like them to go down 25% from manufacturing. wall street is for more of export initiative and free trade. if you look at where we are today, a lot of the president's priorities align with this country from the business side. >> jobs that was job one when he took office. we still have anemic job growth. the fed, it feels, has to pump $85 billion into the economy to try and spur job growth right now. what is it going to take? >> i'll be a little jekyll and hyde. i'm not for quantitative easing. on the flipside although we've created 4.4 million jobs over

the last you know 24 months we've created 200,000 a month. i'm not saying we're near where we need to be by no means. i see the participation rate just like you see it. we're picking up slack in the economy. average work weeks have gone up. >> you don't want this driven by monetary stimulus. a lot of people feel the same way. they say, if this economy isn't necessarily recovering or needs a little help, well, hey, white house, it would have been nice to have that help. is there a role for the president, should have been much more aggressive. >> a few different questions. one, i've been for a large infrastructure bill. it's the fastest multiplier of gdp growth in this country. for every dollar spent it's a 1.16 multiplier.

that's been on the president's agenda today. with respect today, where i'm not a continued supporter of qe3 or 4, wherever we had because manufacturing came out with best numbers since 2011. foreign investment is up construction is up. you have a lot of things i don't think the fed policy actually helps today. . i don't think necessarily it's helping employment. >> very quickly because i'm out of time. i have to ask you a specific issue pertaining to jobs and wages. there is a movement now, for example, mcdonald's workers expected to go on strike on thursday for higher wage maybe $15. walmart is holding food drives for their own employees right now. is it possible that some corporations should be forced to pay a living wage for their employees right now? is that an answer to finding

better jobs for the middle class? >> no question we have to get to the right minimum wage in this country. what that number is, i'm not going to be the one to dictate or debate that number. but it's clear to me that today's number's not working. >> how much? i mean, you don't want to put a number -- assign a number to it but you agree higher -- >> i think a higher minimum wage is called for. >> even with all the economic implications that are often discussed that it then discourages employers from hiring certain employees then? >> you know we saw the -- people used to say health care is changing is everyone is going under 30 -hour work week. we found that not to be true. average work week has gone up, regulations have gone up. >> what's the president's mood like? >> i would say, you know he wants the economy to continue to grow. i mean obviously i would say with the affordable care act, he needs some wins. i think he feels pretty good today that the web sitdsite's

starting to work. >> just curious. >> thank you for joining us today. appreciate it very much. >> we have about 30 minutes, 40 minutes or so go before the bell. the dow is still up 125 points. this follows sharp losses yesterday and in europe overnight. >> however apple one of the few bright spots, that stock has been up 15% in the past two months. is it time to hop on the apple band wagon? get both sides of the story coming up. >> who needs stock when you can invest in drones? we'll hear from a venture capitalist trying to cash in on the drone wars. he says you should too. what are the companies? we'll get into that.

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welcome back. pretty much a sea of red on wall street. as you can see, there is one green arrow, though it is apple, up about $11 or 2% at this point. josh lipton joins us with a look at why the stock is outperforming. is this holiday sales performance, acquisition? >> actually, apple is benefiting here from a trifecta of good news today. one, had you a big upgrade from ubs which raised apple to a buy. the analysts there talked about his institutional money moving back into apple next year. a deal, he said, with china mobile. >> we have been and expecting for a while china mobile would suspect the iphone. we took the iphone up five units

due to this. we expect it to be announced in the next few weeks. >> in fact "fortune" is reporting china mobile has begun taking preorders for apple iphones. all this news on top of what analysts said was a great black friday weekend for apple. there was strong demand due to positive reviews for the ipad air, apple's gift cards and retailers like best buy cutting prices of ipads. this space does remain competitive on black friday. according to info scout, apple's ipad mini was the top seller at walmart. ipad air at target. best buy, the surface came in first. but it could mean a strong holiday season. apple predicted revenue in the final quarter between 5 -- $55 and $58 billion. they think it could be tracking toward the high end of that forecast. >> thank you. apple not exactly at $400

anymore but not back to $705. apparently i said $750 was the high last year. i heard from you on tweetosphere. you're so nice to correct me. $705 was the high. >> brian white of cantor fitzgerald is our bull max wolf is our bear. thanks for being here. brian, first to you, $705 will we see that level for apple any time soon do you think? >> we think so. our price target is $777. we talked about in september we thought this stock was ready to take flight. and you're starting to see it. and i think we're just a short way there. so, we've got a long ways to go i think, with apple. stock is still trading at nine times excash. if you look at pe on apple since 2007 relative basis has contracting 60%. apple's growth has been over 40 in that time in the s&p 400.

the stock is extremely cheap. >> you have been skeptical about the lack of innovation at apple. what do you think? >> i think they'll have a blowout q1 for apple and q4 for the rest of us. the ipad mini is doing well ipad air, ipad retina and nobodyments to talk about the 5c. the numbers in japan are good. the problem with the 5c is the bigger issue which is nothing in the low end for them. they do control the developed world market. they'll take a big piece of japan, take a piece of china. they'll have a great q1. the problem is they're playing catch-up. they need a bigger phone. they don't have one. they need an entry-level phone they don't have one. q2 q3 they'll have trouble beating this number. it's a $600 story. the $777 for apple is unlikely and may not do as well as the dreamline other with the same unlucky number. >> brian, what do you think? >> if apple -- if you did a discounted free cash flow model and you don't have apple growing

at all zero terminal value, zero growth over the next decade, the stock's worth over $6 00. think about that. i think apple will grow. second point there's a lot of new innovation coming out of apple in fiscal '14. we'll have a bigger iphone with iphone 6 we believe. iwatch, apple tv fiscal'15 and apple in chin sna. >> all those products i feel like i've heard people talking about how they're coming they're in the pipeline. shouldn't we know by now? >> it's a great question. there used to be a nasty joke about brazil. brazil was the country of the future. i think the apple tv is a little the technology component of the future. i like the company. it's cheap now. lots of cash lots of growth. going to have a great quarter. the question is whether it's worth 600 bucks, 600 to 650, where i would be comfortable or

worth $750 to $800. i can't get to the second target. >> what would get you there, though? what are you waiting for that's going to get you back on board on the apple growth story? >> i want to see apple give up a little on the margin. kind of surprisingly. and take more market share. they need to have an entry level phone and they need to not tell all their fans i know you love apple. just wait we'll have something like one of the 40 android products. they need to have the product everyone is copying otherwise they can't make extra money having big margin in the field forever. i like the acquisitions they're making. i think they're going for ad network and e-commerce. that's more interesting on the upside catalyst for apple than anything in a watch or tv i can see now. but i could easily be wrong. >> that's why we love max. he makes the case very convincingly and, but i could be wrong. thanks, guys. >> thank you. >> see you later. >> we're not wrong here. the market's still lower today.

dow down 122 points. 30 minutes left to the close. >> is the selloff the start of the correction many bears have been calling for or a opportunity to buy back into the market? we'll get top money managers standing by with their take. will 2014 be as nice to investors as 2013 was? chief economist anthony chan will be with us to give outlook for the economy and markets when we continue on the "closing bell."

smu welcome back. the . welcome back. the selling we saw yesterday is continuing and only accelerated. >> dominic chu is telling us what leads us today. >> tesla is a big mover, at least to the upside. positive, right? german regulators said it planned no more measures after the fires in u.s. morgan stanley named it a top

pick saying the recent selloff makes it a great buying opportunity. celgene bought oncomed. walmart came off lows after it said walmart.com had its best sales day ever on cyber monday. disney, one of the worst performers on the dow. b. riley downgraded from neutral to buy. it's up 40% so far this year. sectorwise, airline stocks are falling. this as oil prices hit a one-month high overall. can you see there, some of the at least downdraft for some of those shares on the airline sector. kel y bill, back over to you guys. >> for amr. thank you, dom. our next guest is here with an exclusive look at what he thinks will move the economy in

2014. >> anthony in arizona and bob pisani. you expect the economy to grow 2.5% in the next year. is it improvement enough to warrant fed tapering? we'll cut to the chase. >> there's no doubt the federal reserve is anxious to start tapering. that will occur over the next couple of months. but remember the tapering will be incremental. they told us they'll continue to keep short-term interest rates at low levels so it won't be all that bad. >> anthony i mean there's the issue about how the economy will do and then how the fed might respond to that. zero in on the employment situation, for example. what do you think happens with the employment rate next year? >> i think the unemployment rate continues to come down. we will see the unemployment rate crack 7% sooner rather than later. i think by the end of next year we could see the unemployment rate somewhere in the rate of 6.5% to 6.8% by the fourth quarter of next year. again, that is happening because the economy is growing a little

faster, consumer confidence is rebounding. by the way, ceo confidence is also rebounding. with that will come hiring. we'll see that especially because capital spending will be stronger in 2014 than it was in 2013. >> one thing the fed's keeping an eye on is inflation. it is not up to their expectations or their target range right now. that's one thing that would keep them from tapering. what do you see for inflation next year? >> i think inflation will creep up slightly. we'll probably still be below the 2% target in overall inflation. that's exactly, bill what will enable the federal reserve to take their time in terms of raising short-term interest rates. remember that at this point with the economy improving and inflation rate not going down but, rather, creeping higher closer to the 2% range, will make the federal reserve comfortable to taper. at the same time keep them on

hold with regard to short-term interest rates which will be good for financial markets. >> anthony, most of the people believe the future of the stock market is largely in the hands of janet yellen and whether or not she can convince the investing public that tapering is not tightening. where do you stand on that? can she thread that needle? >> i think they're already making very good progress with that, bob. i think that they have really put the case very clearly to the financial markets that tapering is not tightening. i think over the next couple of months, that certainly will be universally accepted, that that is the case. i think that janet yellen will do a good job. she's at heart an academic. academics have a way of being articulate when they need to be. >> anthony, what's the message for next year? is it more of the same? there's actually this battle between kind of the secular stagnation and economists, at least on the street, who seem to be pretty optimistic about the economy growing upwards of 3%

next year. those imply two very different outcomes potentially, especially for the fed. what do you think will happen in growth especially in the sectors that will lead us in the next 12 months? >> i think the cyclical sectors -- more cyclical-sensitive sectors will do better in 2014. the message of 2014 is one of marginal improvement. in japan we'll probably see 1.5% growth. in europe we'll probably see a 1% growth. in china we're going to continue to see growth in the neighborhood of 7% to 7.5%. in the u.s. we'll go from a number below 2% to 2.5%. and if there are risks to the forecast, the risk is that things will be better than 2.5% in 2014. by the way, that's a good risk. >> anthony what about the earnings situation? we're growing, what about 4% a year on the s&p for earnings. is that going to be good enough that 4% to bring us up -- we

have estimates 8% to 10% growth in the s&p next year. that's where the consensus is. >> remember, bob, you also have dividends you want to add to that equation. i really think there is a possibility for marginal -- a little more improvement on the margins. i would not be surprised if earnings are a little north of 4%. so, in that kind of an environment, 8% to 10% is not at all unreasonable. price earnings ratio, 16.3. we're looking at forward earnings below that. we can continue to see a little expansion on multiples. a little expansion on earnings over this year. and with the dividends, 8% to 10% organically is reasonable to expect for 2014. where we expect a lot more -- or could expect a lot more would be in places like japan where the margins are much lower, corporate profit margins in the united states so as growth increases, we can really see that leveraging up in earnings. we can see something similar to that in europe.

so, we may very well see earnings north of -- equity market performance north of 8 % in both europe and japan. >> from your lips to the market god's ears. anthony, good to see you. thank you. >> same here. >> see you later. heading toward the close. we've got 17 minutes left in the trading session. actually, coming off the low a little bit here. down 118 points on the dow right now. >> actually it was last december, i think, if you went back, this past may, december being the last time we saw two down days to start the month off. that finished the month off. last month's twitter ipo, the talk of wall street but excitement over ipos has since quieted down. coming up seema mody about why that's happening. after the bell you may want to keep your eyes sky ward. u.p.s. says they're ready to join amazon in sending drones for your deliveries.

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budget concerns in wash and debt ceiling stalemate might be having an impact on the ipo market. >> only nine companies are looking at going public before the end of the year. seema mody joins us for an ipo status report. losing steam? >> might not seem like a lot but that nine is more than what we saw last december. these nine ipos would also put 2013 on track for the most ipos since 2007 when 209 deals priced. some notable companies expected to go public this month including catchmark, anymorelestorage, cheniere aramark and hilton. the bull run on wall street and cheaper dent have created an encouraging environment for companies to go public. add to that stronger market debuts. renaissance capital points out the average ipo has returned

9.4% for the average price. 49 ipos are in the six-month backlog. bad data. now, there may be a strong pipeline oppenheimer cautions dysfunction in washington could result in delayed filings, especially as the ongoing debt ceiling debate potentially comes back in focus. at this point, that worry doesn't seem to be there in the market. >> seema, it's interesting because it sounds like if anything, the ipo market continues to be pretty hot. we'll see if the market action over the last couple of days, bill, cools things off. >> you think it would start to slow down anyway they wait for next year. no question high-profile companies getting ready to go public here. >> hilton is expected to raise $2.2 to $2.4 billion. >> the second biggest ipo this year. >> we'd ask dave about that but

we'd have to go to the mall to ask him. heading toward the close. art cashin signaling to me that really not a lot of selling pressure as we head toward the close. we'll see whether we get the selling pressure as we've had the last few days here. >> the city of detroit officially became largest municipality in u.s. history. today it enters bankruptcy as a judge cleared the way today. the case isn't just about detroit. coming up, we'll take a look at the impact of this decision on muni bond market more broadly and see if it could ignite another meltdown. there's a good chance the portfolio has exposure. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 can take you in many directions. tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of tdd# 1-800-345-2550 our live online workshops tdd# 1-800-345-2550 like identifying market trends. tdd# 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how.

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with investment information, risks, fees and expenses to read and consider carefully before investing. eight minutes left. cashin is right. not a lot of selling pressure. we're so not so far selling the late-date selloff we've seen. it's not exactly buying on the dip but coming off the lows of the day. dow now down 92. joining us michael underhill, shamelessly giving me a copy of his book and kenny from o'neill securities. what's going on in this market? >> december's usually the best month of the year for us. >> yes it is. >> the market is fighting back to close above 1795 kind of a key level, right?

and you saw, we broke it early. we kind of stayed below it all day. as it's coming to the end of the day, can you feel the market fighting back. it wants to close above it. you can just feel it. i think if it does, that is a positive sign. yet i do think, though you might see weakness still in the days ahead. don't think it's over yet. >> profit taking -- >> yeah a little profit taking. there's not massive volume so that tells you big asset managers are sitting tight. they won't react over a 1% move in the market. >> what do you see happening? >> when i look at the market right now, i look at an ekt doelgts evidence. 80% of the time, december's a risk on 3% to 5% upside. i see equity participation, full investment, a lot of the active managers. we're looking for corrections in stock. if someone misses on earnings 10%, 15% correction then we'll buy meaningfully. we're staying less than 5% in cash management. >> how many times in 116 years was the fed pumping $85 billion into the economy?

>> that's a great -- i'm not trying to use the old adage it's different this time. >> it is. >> but it is different. >> absolutely. and it's on steroids. when you look at it right now we have high performance due to steroids, due to the fed. they're not going to tap the brakes. when i look at janet yellen she says she's dovish. ken and i were talking about this. when you look at valuations, it's been sector country you have to screen stock by stock basis. >> ditto. >> the fact the fed is still in this and we start to get some selling here where they're not buying these dips what does that say about the feeling in the market here? >> i don't think you'll get to that point. i think they are going to buy the dips. >> you think they will? >> i don't think you'll get 10% correction by any stretch, you know. if we break the 1795 level and we test it again i think we go to 1770 1775 and that's about it. i think there's a lot of money and people just waiting. >> we should point out -- i pointed this out earlier. europe was the weakness today. they finished well down on their lows at the close.

and that seemed to weigh on our market today, didn't it? >> it did. now you see at the end of the day here we are trying to rally back a little bit. don't forget the fed pumped $4 billion into the market today, which muted -- probably help mute this selloff today. >> vehicle quickly, anything you'd buy right here? anything present value? >> i look at the great rotation health biotech is overvalued. utility is undervalued. emerging market is on sale. growth on sale. have you to take a look at country by country valuation. >> emerging markets. >> he's right. >> thank you for the bette, by the way. >> we'll kol back with the closing countdown. look up in the sky, it's a bird a plane. no, it is a drone. there may be plenty of them soon. first it was amazon. now u.p.s. and fedex say they may be zooming across the sky to deliver your packages via drone as well. and investors are sideszing up this market which we will do as well coming up on the "closing bell." you're watching cnbc first in business worldwide.

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just 95 point on the dow at 15,917. terry dolan, are you ready to buy this dip? is this enough of a dip? are we going to get a bigger dip? what's going on? >> i don't think this is quite the dip. maybe a little room on the downside. with markets as thin as they are, i would look to buy it for a closing rally above 16,000 again. we're looking for 16,100 16,200 closing for end of the year. if you look at that like we are, you might want to start buying something. i think you'll see further weakness into tomorrow. >> i don't want to get too far ahead of us but last year monster rally to begin the year. monster rally. sort of set the stage. do you see that happening some more or does this market feel like it's getting tired? >> i don't. i think the market is getting a little tired. i think investors are enthusiastic. that has to be curbed a little in terms of expectations next year. i think the idea is to watch to see what happens with rates, even if the fed doesn't take their foot off the gas. rates are moving higher without

them. >> good to see you. appreciate your thoughts on the market. we're going out off the lows. down 9 2 points on the dow jones industrial average. stay tuned now for the second hour and all-star panel joining kelly evans for the second hour of the "closing bell." i'll see you tomorrow. welcome to the "closing bell." i'm kelly evans. a pretty rough day on wall street. the dow jones industrial average managing to stay shy of a trip. digit loss. 0.6% down. nasdaq to 4037. s&p 500 still below that 1800 mark. it lost about a third of 1% today. let's get straight to it with today's "closing bell" panel. kayla joins me cnbc krinters josh brown and dan greenhouse. andrew stoltman and joining us is "fast money's" brian kelly. josh brown, first of all, what's going on with the weakness the

last couple of trading sessions? do you read a lot into it. >> today is one of those days. we've had a few over the course of the year that were huge head fakes. this is countertrend action we're seeing. specifically when you get more granular, you look at where the leadership was today on a rough day. you look at the sectors that did well and did not. for example, defensive stocks leading. banks and auto weak. the challenge for professional asset allocators is not to read too much into that. not too make too much into one day's action. >> dan we're going back and forth about this earlier, but is there a first day of the month gauge, in other words, the fact we were down yesterday, the fact we're down today, does that tell you something here? >> no. i think there's a lot of statistical incision here alal insignificant. >> if you look back september 2012 first two days of the

month were down and the rest of the month was up 2.4%. there's no correlation there. i expect whatever happens in december has no bearing on these first -- it's not related -- >> if it's not about, you know the timing in terms of the month, if it's not -- if we shouldn't read too much into the last couple of trading sessions, where should we look right now for guidance? >> look at what happened today? one, europe down. very hard in the morning. actually going into the close. we found out the reason for that. that was because the ft published a story talking about massive fines coming probably tomorrow for the major banks. that is something that is probably a known known, out there. don't have to worry about it. now you look to oil, 2014 you'll make or break it in oil. and interest rate. those are the two things. can if you can get that right, you'll get the rest of the market right. >> financials will be back in focus for a couple of trading sessions. i don't know if it's about regulation in europe about the fact that the volcker rule is close to finalized here or just

seasonalities. the fact the number of u.s. banks is below 7,000 for the first time ever. there's a lot of different cross-currents to deal with. >> fewer and fewer lenders coming to the fore. a lot of regulators coming to the fore in the next few weeks. will we get on the record comments at goldman sachs conference next week. we saw the 30-year fixed interest rate drop again today. the ten-year dropped -- rise in price but yields dropped. part of that is because of the buyback. a lot of traders and financial executives saying if you expected this downturn in equity markets to be sustained, you would see the interest rates start to rise as well. >> this is an interesting question. it's kind of are we back in that old markets are sinking, yields are falling together or is it the fact that you know there's weakness on the prospect of higher interest rates going into 2014? andrew, thoughts here? >> you know i don't think anybody knows at this point. i think this volatility in the

last couple of days was a good reminder there are still a lot of land mines in this market. still a lot of things to sink this is market. it's a good reminder to retail investors and others there's a potential real downside to this market because most of the good news has been baked into the stock prices. it's kind of scary to see what's going to happen but a lot of things that can still go wrong. >> hi it's dan. when you say a lot of the good news is baked into the market how do you make that type of a determination? >> you take a look at the bullishness that's out there, the small investor getting back into the market. you take a look although fundamentals of the market. you see all this money coming into the market and you hear very little on the downside potential risks that are clearly out there. it just remind me of the summer 2007, it reminds me of early march of 2000 right before big selloffs -- >> you're saying we're on the cusp of a big selloff? >> i think the market says right now, no. i think that's dangerous. because i get really nervous

when everybody is so bullish right now. i think that's where we are. >> i've got to take the other side of that. if you look at wall street sentiment, merrill lynch publishes a sentiment indicator. that's been a pretty great contrarian indicator. they're still showing wall street strategists are very far away from peak levels of bullishness. they're not even at historic norms. on top of that, only 53% of americans currently hold stocks according to gallup. that is a 15-year low. i'm not sure how we can say that everyone is piling into the market. wall street's not in. retail's not in. >> yes. yes plus a thousand. this is exactly what we were talking about yesterday. the same survey you mentioned. i don't think people realize, but in general, there's more skepticism still among the pros about whether you should be exposed to equities here than there is bullishness. >> of course. >> the retail investor is not in. wall street is.

the council on foreign relations said the u.s. public -- >> it's very concentrated. >> how everything was going. there is no real read on sent want. >> i would counter quickly by saying, most of what you hear is anecdotal. data suggests we have a long way to go in terms of america drinking the kool-aid and -- >> what's propelling -- >> small slice of the population -- >> let me get brian kelly in here. your thoughts. >> let's look at economic data we've had recently. the pmi numbers we've had globally have been fantastic. the ism number we had here on monday, if you look at the employment subcomponent of that that suggests on friday we're going to get some pretty decent jobs growth. that's a positive thing. if you sold stocks today because where interest rates were going up, that was the wrong thing to do. >> if i could jump on brian's point. i make this point all the time on cnbc. i'm clearly not getting through. interest rates on the ten-year yield are up over 100 basis

points over the last let's say, year and change. on a total return basis, the s&p 500 is up 30%. so, if i were to tell you that ten year -- the ten-year would go up 100 basis points and you sold, you've been out of the market for an extraordinary large and power of round. >> does that mean we're taking too much attention to the fed here? >> it's not that you're paying too much attention to the fed. i think the fear of higher interest rates at 2.1% 2.2.2.5%, obviously, base on the price action is misplaced. there is a level that quote/unquote, breaks. 2.5, 2.7 is not it. >> i'm not sure i followed you. stick around. we have to let brian kelly go. plenty more from him on "fast money" at 5 p.m. a lot of red arrows. let's get a check on some of the biggest losers today. dominic chu with a look at them. >> here we are, accentuating the negative. how about consumer discretionary stocks taking the brunt of

selling. amazon.com slipped 2%. one of the biggest drags on the s&p 500 after a disappointing start to the holiday shopping season. then ford and general motors also losing ground despite better than expected november auto sales. looks like investors are taking profits in those auto stocks. and yum brands a loser on news that plat november china sales were in the headlines. china is its biggest market. investors were disappointed there was no growth in that key market for them. finally, it's krispy kreme doughnuts. it got well creamed, the best way to put it. after giving fiscal 2015 guidance below wall street estimates. that report in earnings broke in yet's "closing bell." that selloff in those shares continues. >> i was just looking. it's amazing, down 20% after we thought only down 10% earlier in the session. thank you, sir, for walking through all of that. now we've got breaking news. get this on the former ceo of tyco dennis keselowski bertha

coombs joins us. >> dennis keselowski will be a free man after serving 8 1/3 years. today new york state parole board granted him parole and free effective january 17th. kozlowski, in 2005 was convicted of having essentially cheated and taken money from the company. he and his former cfo mark schwartz both convicted. together their defense attorneys say they have collectively paid $134 million in restitution. mark schwartz will also be freed on parole as of january 17th. the end of an era for dennis kozlowski, who you'll recall at one point was the man who became the symbol of greed because of that $6,000 gold shower curtain. >> yes, that's right. bertha coombs, thank you very much. i want to get straight to the panel on this. andrew stoltmann, you're the lawyer, your thoughts?

>> it's outrageous. african-american kids who hold up a convenient store, and serving 10 to 20 years in prison. dennis kozlowski, jeff skilling of enron getting off in less than 10 years, kozlowski, eight years. the punishment did not meet the crime. he should still be serving time given the loss of shareholder sustained, the amount he looted from the company. it's outrageous. >> josh, you want to respond? >> i think each one of these cases is separate. kozlowski probably should have committed the tyco fraud closer to the financial crisis. he might have gotten off. maybe it would have just been a fine. i think he messed up on his timing. >> tyco is now a bad word at the company. the ceo of what's now called te connectivity came on cnbc a few weeks ago and said there's a jar you put a coin in any time someone says tyco around the office. >> incredible. as of january 17th he'll be

free. bertha coombs will continue to follow that story for us as well. much more ahead on today's market. first, though, courtney reagan joins us now with some breaking news on jcp. >> just getting word here from jcpenney of its november same store sales for the month of november, up 10.1%. that is very strong growth out of jcpenney. we know they've suffered a lot of trouble in october. they did see some positive same store sales for the first time in over a year. i don't have the comparison right here. we have not seen this strong of growth for jcpenney up 10.1% for november. this does include that black friday weekend, so it's november 30th which is through saturday of this past weekend. back to you guys. >> all right. 10% comp. if we can, i want to throw this out for the panel to react to. dan, we knew the jcpenney story was interesting. some people in the quick money, if you will, saying when it got super low, below $9 a share, maybe it's a short-term play. then october comps turned

positive. now 10%. is this a real turn-around story now? >> full disclosure, my company, we follow jcpenney we have a buy rating on the stock. we think it goes higher. when you look at the performance over the last couple of weeks, it was the best performing s&p 500 stock last month. there's a little bitter ofrt bit of excitement being built into the stock. things are flat lining if not turning around it seems like there is upside. >> here's the question for investors, do they want to be exposed to jcpenney at $10.50 a share, because we know these comps are coming off huge declines in the couple years fryer that. >> that's the secret. you saw best buy go into 2013 as though it were game over. and then proceed to triple in value. >> that's true. >> low comps are phenomenal for investors. what's even better in the jcpenney situation, 30% of the float is still short. it's a lot of pain. those are a lot of guaranteed buyers. if these sales trends continue. the one caveat we don't know

how profitable these sales are. they could be giving thing as way in the name of improving revenue but not doing the bottom line -- >> the comp is nominal. if they're up 10.5%, that could reflect discounting. you could potentially say their volume might have even been stronger. in other words, that that still reflects deep discounting. >> look if they're giving away dvd players hoping somebody will come into the store to buy a mop, that's not exactly the kind of situation that you want to buy into. if you're an investor. but for traders, you have a situation where, look this thing was priced for bankruptcy. now they've had enough time to right the ship. we don't know if they can ever grow again. if it's not going to zero what's it worth? >> jumping off that point, i would add second derivative trade, other retailers have picked up some jcpenney clients, tj maxx of the world, because if jcpenney is turning around perhaps there's a knock-on effect. >> this is an important weekend,

but the question for long-term investors is can they sustain that growth? 10.1% on what were relatively weak sales, even in october, when they turned positive. whether they can keep that going through the entire holiday season. on the other side of 2014. no one really knows. >> there was some chatter about rivals potentially using discount pressure, for example, to drive the jcp totally out of business. that talk may be diminished now in light of that comp. we saw shares moving after hours. we'll keep an eye on them tomorrow. find out what one trader says is capturing attention on the floor today. plus, a story generating plenty of buzz on our twitter page. >> have you asked for a raise before? >> i have. by myself. and i was pretty much just told you know it's going to coming eventually. just wait. >> that was our interview yesterday with a disgruntled mcdonald's employee who's pushing to raise the minimum wage.

harvard economist martin feldstein. we'll get reaction from new nuvene asset manager, holder of detroit's biggest portion of detroit.

it was almost a triple digit loss for dow jones industrial average. we want to pick up with market coverage of what happened today and whether it's the beginning of something bigger with cnbc contributor rebecca patterson joining us with gordon from rosenblatt securities. gordon, you heard people saying on the floor here -- we were sitting pretty weak all day. >> it's been an interesting couple of months here. i was chatting with industry giants sol ruben and going over what we've seen. there was weakness out of asia. they tried to rally off some numbers but they couldn't get into positive territory. then the same thing happened today, but maybe a little more so. >> gordon, you're saying this is a virus spreading from asia?

>> originally, i think that's what started it. a couple things coming into the play. beginning of the month sort of develops its own character. we're getting to the last month. it will start slowly. we had a spike in oil prices today. obviously, that hurt the transports. we're seeing a little rotational action here as the vix starts to lift here. >> rebecca, what about that. if you were to look at the vix, up 15%, 20% over the last couple of weeks now. have you that on the one hand. you have this talk about i don't know higher rates next year. is there really a sense of people moving out of equities or are we making too much of this? >> i think we're making a mountain out of a mole hole. the vix is up 20% but 20% from nearly a decade low. the vix isn't telling us we need to be overly concerned at this point. yes, we got slightly higher oil prices but oil is relatively low.

gasoline prices are still very low. that's good news for the u.s. consumer. as brian kelly pointed out earlier, we got confidence data this week globally it's at its best levels in 2 1/2 years, including new orders and employment sub indices. the global story is improving. yields should rise a little in that environment. i think stocks are going higher into next year. i'm comfortable staying overweight in this. >> there was a line from michael darden where he said you know markets know something that financial commentators don't. fundamentals and confidence are improving and will continue to do so. do you think there's an element of truth in that? >> well, i think you financial commentators are doing just fine but i do think, you know the world isn't robust. we know that. unemployment rates around the world are still way too high. but if you look at the world, it is getting less bad. china has stabilized. japan is trying to move things forward and u.s. is slowly but

surely healing. so we could see better earnings growth next year. >> that's true. >> you mentioned europe and i want to pick up on that. when we look at a france selling off 2.5% selling on the close, when everyone has piled in there, does that worry you? >> i think we're getting profit taking after a big rally. we have a european central bank policy meeting coming up. we've seen mr. draghi head of the ecb, can surprise. we got a rate cut trying to support growth there. i think the market is convinced we won't get anything out of it this time. i think the bias is still to ease, fight inflation, at the margin that plus global trades should help slowly get less bad. and less bad europe is good for the u.s. especially given s&p revenues coming from overseas. >> gordon, final word? >> you know look we trade down here. that's an emotional process. should the market be ten times, 15 times, 20 times, what is the properly multiple? that's sort of a subjective

number. the fact of the matter remain, if fed tapering leads to some sort of perception this is the time to get out of equities then that's what's going to happen. that's what we have to be mindful for. what will be the emotional focus as we get into the remainder of the year. >> it's so emotional, gordon for a trade. thank you for joining us. coming up detroit getting the green light from a judge to proceed with its bankruptcy filing. reactions from the seconds biggest holder of detroit's debt is coming up next. we'll discuss what this could mean for muni bond investors. ♪ i want to spread a little love this year ♪ [ male announcer ] this december, experience the gift of unsurpassed craftsmanship at the lexus december to remember sales event. some of the best offers of the year. this is the pursuit of perfection. [ male announcer ] here's a question for you. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million?

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of the best offers of the year [ ding! ] at the lexus december to remember sales event. this is the pursuit of perfection. detroit getting the official go ahead to file for bankruptcy protection. scott cohen has been at the courthouse all day. this is one of the biggest filings in history. what happens next? >> reporter: what happens next is more court battles. in fact, the city's largest union within minutes of this ruling was announced, around 11:30 eastern time this morning, filed notice it plans to appeal and the stakes are huge. this ruling clears the way for massive cuts in the union's pension and health -- retiree health benefits cuts the union say are not only illegal but unconstitutional. some are talking about appealing all the way to the supreme court. others say their displeasure may not be limited to the courts. >> we're going to be out here in

the thousands, in the tens of thousands. there's going to be no peace in this city. >> reporter: judge steven rhodes who read a 90-minute summery of his 140-page ruling from the bench says he sympathizes with the concerns but says the path detroit is on now is not only unworkable but dangerous. that leaves it to state appointed emergency manager kevin ord to refinance city finances. he says it's time for the parties to begin working together. >> come forward with us. take this opportunity, even in the process of litigation and appeals to try to get at the sorely needed reform that this city has got to achieve so we can move forward into a new day. >> reporter: the unions say the time for negotiating was before the bankruptcy filing and the judge did say the city did not negotiate in good faith. but at the same time it was impossible because the union

wasn't willing to talk. kelly, back to you. >> wow, scott cohn thank you very much, sir, for following that for us all day. it's been a marathon day for him. among them obligations in jeopardy in detroit are municipal bonds, which compared with stocks, haven't been doing very well this year. they are a huge source of income for a lot of retail investors. joining me now is john miller co-head of global mixed income at nuvene asset manager. welcome. >> thank you very much. >> you are one of the biggest creditors of the city of detroit. are you confident you'll be repaid? >> our credit is in the water and sueewer system of the city of detroit. we have a combination of insured and uninsured water and sewer bonds, the emergency manager has stated those are secured bonds, secured by revenues of the water and sewer system itself. we feel reasonably constructive about that holding. >> what's your take on the implications more broadly of what you heard from the judge today? >> this was expected. expected they would be deemed to be eligible, insolve ant and

they goss a pass on whether or not they actually negotiated with key stakeholders. i think that detroit has had a negative impact on the municipal market broadly. it's been a little over -- perhaps, overdone or overshadowing, i should say, some of the positive trends happening within municipal credits generally. >> and for the people who would say, i hear the headlines about detroit, i hear headlines about illinois now, i hear headlines about even if we go back to jefferson county, i mean why is it that in these cases, even as we're seeing some of the biggest bankruptcy filings from municipalities in history, that there's still value, you think, in this space? >> sure. a couple things. first of all, there were a total of 110 different municipal entities that missed a coupon payment or defaulted in the year 2012. there are 42 this year in the year 2013. it is down sharply. also you mentioned jefferson county. they are actually emerging from bankruptcy momentarily in the next week or so with a deal --

financed by a deal they priced last week. investors are poised to receive 80 cents on the dollar to par, depending on the specifics. so there are some positive recoveries actually happening in prior defaults. >> it sounds like part of the strategy is to be selective. in a case for detroit you go for water and sewer and not necessarily other bonds. what about puerto rico? >> some fundamental concerns there. again, i would say municipal market broadly is trading differently from the way in which puerto rico based securities are trading. >> do you have -- have you avoided puerto rico? >> we have tended to keep our exposures light and we've done trimming over the last 12 months, so we are one of the small participants in puerto rico. because of long-term fund mental concerns we have about their economic basis. >> if having exposure to debt like puerto rico or detroit which is high yield, risky, if you have to pull back on some of those places because of investor concerns, does that mean people

are going to get less yield from your funds going forward? >> well we're always looking to maximize the risk return to maximize the yield per unit of risk we take on. the advantage the selloff the municipal market has had right now is that a lot of credits which are fundamentally strong are being sold at relatively cheap prices. and we want to continue to invest in fundamentally sound securities that offer a lot of yield. >> finally, and this is such an important issue f you are long on municipal bonds, does that mean you are short on pensions? in other words, does that imply you think that pensions have been overpromised and will be trimmed in the future? >> we don't necessarily have to be buying municipal securities that have deeply underfunded pensions. so it's not always bonds versus pensions. we're going into those specific municipal credits, many of which are individual revenue bond projects, which don't have a big pension problem. but we can navigate through avoiding underfunded pensions

and buying fundamentally sound securities going forward. >> trying to keep investors from jumping ship as they have this year. perhaps creating some opportunity as we head into 2014. john, thank you very much for stopping by. john miller from nuveen funds. picture this -- your dry cleaning delivered by a drone, dinner delivered by a drone, anything small enough delivered by a drone. might sound cool. up next we'll speak with a venture capitalist who has made a hefty bet on the cutting edge technology. wait until you hear his vision for the future and how many money he's putting behind it. that's coming up next on the "closing bell."

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thank those who helped you take charge of your future and got you where you are today. the boss of your life. the chief life officer. ♪ ♪ welcome back. people are still buzzing about amazon's drone delivery system and other companies like u.p.s. coming out of the woodwork saying they've been investing in drone technology as well. is this the beginning of drone wars? our next guest thinks so and he's putting his money where his mouth is. the panel is here with me. first of all, this drone thing is not a pr stunt. it sounds like there is already

a small industry cropping up. what's your involvement with it? >> absolutely, kelly. thanks for having me. my involvement is we're so bullish on the drone revolution. we feel like it's going to be the next mobile application type of market from 2007. there's already been $40 million already invested this year in the first mine months by major venture capitalists, and we put our bet on a company called sky catch. christian sands and chris bomb garter in. we love their energy and ma they're doing. rahm shiran from google is there, and early employees from google and facebook are also there. >> because the problem is, you can i guess, bet on technology bet on drones becoming more common but you would have to bet that regulation doesn't interfere. given the initial way the public is sitting here going, wait a minute my sky is filled with drones, that might be a risky bet to make. >> you know what what jeff

bezos did is give public awareness to everyone. what's happening is it's being used all oefrt world for commercial applications. it's been in mining, energy, construction. it's big in search and rescue missions right now. even things in africa that help with poachers when going after elephant tusks. we feel after 2015 when the faa rules do change, the industry will be tremendous. we're talking $10 to $15 billion in the first year and maybe up to $100 billion. >> andrew, is this happening? do you see any reason why we're not going to move towards a landscape that is dotted with drones? >> well i mean i think it's -- i think it's just a really bad idea. there are so many legal liability issues. so many safety issues. what's going to happen the first time when a drone crashes into somebody's home? what's going to happen first time a drone crashes into a -- crashes into a school bus? there are privacy concerns. i don't want commercial interests like amazon flying over my house, seeing what sort

of car i have in my driveway my backyard and sending me e-mail solicitations to buy some of this stuff. it's a ridiculous ridiculous idea. >> what happens when a car drives into someone's house? >> it's different. it's different. it's not a business operating that car for the simple reason that, hey, look with amazon.com, if you want anything, you can get it within 24 hours. a lot of the things you can download in seconds if you're talking about music or a book. there's no need to say people have to have this stuff within 30 minutes. >> go ahead. >> yeah. andrew, if you think about this people -- i'm in the state of north carolina. when the wright brothers were thinking about who would be first in flight with airplanes out there, everybody thought they were crazy. if you look what's happening with that industry then satellites, you don't think the faa will have regulations that will protect us? safety's first. that's what all of these startups are all about, is making sure everyone's safe. >> there are a couple things to unpack in that. there's the issue of ir space safety and then the issue of

surveillance. i understand there are things on that front happening. you think about spacex part of the case for spacex is basically selling surveillance to hedge funds, for example. >> so all of those applications that you mentioned, it's really exciting stuff. i agree with you. this is definitely coming. but i agree with andrew as well that i don't know if we're going to make that leap from things like wildlife rescue and mining safety into an uncontrolled environment with a lot of civilians like a city or even a suburb. i think we have to draw the line somewhere. i'm not sure if anyone wants their children walking beneath rotors. >> kayla, what would be uncontrolled about it? maybe you argue, all we need is to regulate the skies the same way we do the roads. >> that's certainly an argument that needs to be had. my question is a more basic one. you referenced $10 to $15 billion for this industry potential in the next three years. i think of this as very limiting

technology because you can only deliver something under five pounds. you can only deliver it in relatively rural areas. how are you going to get a drone to a multi-family home? i mean, that technology isn't really there yet. so i see this as relatively limited. and the type of customer you're actually able to reach, the type of product you're able to deliver, you can't deliver, you know, high worth products because those will need a signature in most cases. i mean -- >> you say, excuse me to the office i have to go home and sign for the drone. >> you bring up a great point. everyone's focused on what amazon's doing since they're spending $6 billion a year just on shipping. for them it's a win. if they could cut into that get more profit, it's a win. what people are missing here though, is think of your fedex truck, u.p.s. fedex is looking into this. u.p.s. is looking into this. google. everyone is looking into this that no one really knows about because it's really early, in the infancy of the revolution.

your fedex truck and how a truck will come out and you'll see five to ten drones coming out. it would be really safe the way they'll be shipping some of these packages. >> i would personally run if i saw that. i will run very far away. >> i'm sorry, the attack of the drones. >> let me ask you a quick question. 70% of the united states is overweight or obese. is there any plans to deliver roast beef sandwiches or cheese burgers? that's how you'll get an in. >> if you google disrupt, sky catch had the taco copter. they showed how a drone came up and dropped taco bell. absolutely. if you want your fast food, it will be there for us. >> you're saying am zone stole this idea from them, actually? >> comes back to the taco copter. >> the octo copter -- again, we're dismissing it at first but it sounds like the industry is moving towards something like this being the case in the not too distant future. some investment ideas as well. the minimum wage debate has

been raging on our twitter feed since the interview with the mcdonald's worker yesterday. >> the mcdonald's corporation has well over enough money to pay its workers, what we deserve. >> harvard economist will weigh in on that next. we'll talk about the job market the impact of obama care, fed tapering and much, much more. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. [ male announcer ] what if a small company became big business overnight? ♪ ♪ like, really big... then expanded? ♪ ♪ or their new product tanked? ♪ ♪ or not? what if they embrace new technology instead? ♪ ♪ imagine a company's future with the future of trading. company profile. a research tool

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the last 24 hours about an interview yesterday on the "closing bell" with the current mcdonald's worker. he makes federal minimum wage $7.25 an hour and plans to participate on a strike thursday this week in hopes of getting a raise to $15 an hour. here's part of what he said. >> if it wasn't for us these companies wouldn't make as much money as they do. and i believe they should be able to pay us more so that we can live our lives and be happy. >> that got a lot of e-mails and tweets. some of you in support of the worker. also plenty of e-mails like this one from ed in connecticut who wrote, when the kid with no known marketable skills and six months' experience asks for $15 an hour at a fast foods restaurant, he's asking for a raise without justifying it. when he was hired, he was probably chosen over dozens of other young people who would have loved to have that job at that wage. if he wants more money, he should find a better job. plenty of emotion and politics in this topic. legendary economist martin

feldstein teaching at harvard university joining us at the new york stock exchange. welcome. >> good to be here with us. >> off the bat, what do you think the right level is for minimum wage in this country? >> it's very hard to talk about this country. the wage that fits with the cost of living in new york and that new yorkers may be willing to support when they go to buy a mcdonald is going to be different from the wage in georgia or alabama, where incomes are lower and people are not going to be prepared to spend as much. that's why we basically have a system of separate state minimum wages. >> that's true. in fact, a lot of states have their own initiatives, a lot of municipalities and even major airports have gone about raising the minimum wage on their own initiative. is there any evidence that's been a negative in terms of broader employment for that area or for the population young people, less educated people involved? >> we see a lot of unemployed

young people who, if they could get a job at5 -- $5 an hour let alone $7 $10, $15, would be more employable. so it's a problem. >> if someone were to take a job at $5, there were no minimum wage, and that equals out to $10,000 a year what do you do about that? here's the argument for example, a mike will make at fortress. he'll say the u.s. taxpayer winds up subsidizing these employers for not paying their employees more because then they draw on government transfer payments to make up for the rest so they can get to a point where they have enough income to live off of. >> many of these just making the minimum wage like the guy in yesterday's interview, are living with their family. i think half of the people who are making just the minimum wage or below are under 24 are living at home.

i don't know about the living at home part. i know about the age. so it's really strange to combine the idea of we need to have higher incomes regardless of whether we're talking about a kid with a part-time job or somebody who's trying to support a family. and that's why public policy supports families with transfer payments, food stamps and the like rather than trying to regulate market wages. >> and is that your preference that if we were to for example, abolish the minimum wage and that meant more people had to draw on medicaid on food stamps on the earned income tax credit those kind of things, which would increase the amount a u.s. taxpayer was subsidizing, you would prefer to see that outcome than an outcome that raised the minimum wage or doubled it. >> i think doubling the minimum wage would be a mistake. i don't think anybody is serious about eliminating the minimum wage. i think we have a reasonable mix in which we use income support

programs, food stamps and the like to supplement people based upon some attempt to measure how much they need. is this a family of four with two little kids? is this a high school kid working after school? >> do you agree, would you diagnose this country as having an inequality problem? is it one that can be fixed through these kind of measures? >> i think in a sense every country has a poverty problem. i like to think of it as a poverty problem rather than an in inequality problem. i don't think there's anybody wrong with somebody who makes a high income because they bring skills to the marketplace, whether they're a basketball player or security analyst or a lawyer or a surgeon, that's okay with me. i think the problem to be dealt with is poverty, not inequality. >> we need to figure out what to

do about that. we're out of time. i wish we could talk for another 20 minutes. will you come back? martin feldstein currently at harvard ooumpt. thank you so much. >> with today's market weakness cnbc.com is seeing plenty of action. we'll get into the hot list. : 1-888-648-6021 there are trading opportunities tdd#: 1-888-648-6021 just waiting to be found. tdd#: 1-888-648-6021 at schwab, we're here to help tdd#: 1-888-648-6021 bring what inspires you tdd#: 1-888-648-6021 out there... in here. tdd#: 1-888-648-6021 out there, tdd#: 1-888-648-6021 there are stocks on the move. tdd#: 1-888-648-6021 in here, streetsmart edge has tdd#: 1-888-648-6021 chart pattern recognition tdd#: 1-888-648-6021 which shows you which ones are bullish or bearish. tdd#: 1-888-648-6021 now, earn 300 commission-free online trades. tdd#: 1-888-648-6021 call 1-888-648-6021 tdd#: 1-888-648-6021 or go to schwab.com/trading to learn how. tdd#: 1-888-648-6021 our trading specialists can tdd#: 1-888-648-6021 help you set up your platform. tdd#: 1-888-648-6021 because when your tools look the way you want tdd#: 1-888-648-6021 and work the way you think, you can trade at your best. tdd#: 1-888-648-6021 get it all with no trade minimum. tdd#: 1-888-648-6021 and only $8.95 a trade. tdd#: 1-888-648-6021 open an account and earn 300 commission-free online trades. tdd#: 1-888-648-6021 call

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welcome back. which stories are topping the cnbc hot list right now? the site's managing editor calling them out for us. >> right now we have a market story by patty daum. she is urging investors to embrace the sell-off. about three dozen folks per minute are diving into the story. she is making the basic point. everybody has been talking about a pull back. maybe it's the sign of a normal market. our next one has been kicking it for us all day long. which countries are the most and least corrupt? at the bottom are some that you would expect. at the bottom? scandinavia. >> didn't i read that the u.s. tied at number 18?

>> we're a definite c plus for us. there you go. finally our final write up of the day that is getting reader interest right now is diana's piece. now they are beginning to tick up. it was more than a point lower. maybe people need to start locking it in. it's already logged on a few thousand readers already. >> i guess a good sign if people are interested in real estate? >> in is usually the quietest time of year right? >> listen the bring period is the traditionally strong period. in patty's number one story, she talks about how one of the primary threats to the market is higher bond yields.

the spring selling season is a traditionally strong one. >> there are all of these traditional worry spots out there. maybe we don't need to be quite so agitated? >> if you have an investment time horizon, it would be irrational to route for anything but a sell off. >> in the stock market? every year we get an average of three 5% pull back and we get a 20%er every three afteryears. that is what we should be routing for. >> a wise man once said that we were at all time highs. >> we have got to take a quick break. we are getting a ton of tweets now. what you had to say about that and final thoughts from the panel. stay right there. those dreams, there's just no way

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just imagine the target practice in air space over east los angeles. i don't get it. i miss jokes all the time. but i do want to get to andrew. we were talking about this delivery system and the past. just a final word whether it's on drones or something else that you're still agitated about this afternoon. the soap box is yours. >> look, i know we like making jokes but think about it. if you work in chicago like i do or in new york the last thing you want to do is see drones buzzing in your air space because a real concerns that the bad guys will take drones and use them for some nefarious purpose. nobody knows if that is going to happen. >> i know amazon wants to be able to do this. that's fine.

balancing act. nobody is focusing in. >> i'm not a buyer of amazon at today's business. >> if terrorists get control of those drones this is a money losing business. you heard it here first. a money losing business. >> dan the payroll support is it going to be a game changer? >> that's not going to change the story. the fed is not likely to taper in december. the big question is whether or not you see abacceleration. >> i'm not into drones. >> i like. that thank you so much for joining us. we promise not as much drone talk today but melissa lee will have a little bit more on this. >> i'm sure everybody out there wants to know how they can invest on this drone story.

80% of revenues come from drones mostly sold to the military but there are some potential uses obviously. we will see if the company is willing to get into that area. it should be an interesting one. >> ask them how they feel about delivering tacos? >> as long as it's under five pounds. great show. "fast money" starts right now. live from the nasdaq market site in new york city's time square i'm melissa lee. is today's pull back different from the others? the keystone pop. oil prizes rising on news. and abercrombie ceo says his company makes clothes for cool kids b